STRATEGIC ISSUES AND PROBLEMSAndrew Barker, brand manager for Snapple beverages at the Dr Pepper Snapple Group, Inc., has been charged with the task of assessing a new market opportunity for the brand. The decision has been made by senior company management to explore a new energy beverage as a part of a corporate business strategy to focus on opportunities in high-growth and high-margin beverage businesses. Barker must determine whether or not a profitable market opportunity exists for a new energy beverage brand to be produced, marketed, and distributed by the company. He must then make a recommendation as to whether or not the company should introduce a new branded product into the energy beverage market. Any proposal to enter into the beverage market requires a marketing strategy for a branded energy drink, including a first-year sales and profit projection. It is important to note that Dr Pepper Snapple Group, Inc. is the only major domestic nonalcoholic beverage company in the United States without a significant branded energy drink of its own. In order to come to an educated conclusion, Barker must assess Dr Pepper Snapple Group, Inc.’s current situational analysis, analyze the energy beverage market in the United States, and consider the market opportunities available to the company. The problem facing the Snapple brand is how to maintain its competitive position given an environmental threat (energy beverages). They must determine whether or not it is strategically effective to enter the energy beverage market, while at the same time preserving profitability and its customer base. DR. PEPPER SNAPPLE GROUP, INC.

In the United States and Canada, Dr Pepper Snapple Group, Inc. participates primarily in the flavored carbonated soft drink (CSD) market segment. Their key brands are Dr. Pepper, 7UP, Sunkist, A&W and Canada Dry. In 2007 the company had an 18.8 percent share of the US CSD market segment (measured by retail sales). In the non-CSD market segment in the US, Dr Pepper Snapple Group, Inc. participates primarily in the ready-to-drink tea, juice, juice drinks, and mixer categories. The key brands in this segment are Snapple, Mott’s, Hawaiian Punch, and Clamato. In Mexico and the Caribbean, Dr Pepper Snapple Group, Inc. participates primarily in the carbonated mineral water, flavored CSD, bottled water, and vegetable juice categories.

Executives also identify the key elements of the company’s business strategy, which each capitalize on company strengths. The key elements are: 1. Build and Enhance Leading Brands
2. Focus on Opportunities in High-Growth and High-Margin Categories 3. Increase Presence in High-Margin Channels and Packages 4. Leverage the Company’s Integrated Business Model
5. Strengthen the Company’s Route-to-Market Through Acquisitions 6. Improve Operating Efficiency
PLAN OF ACTIONThere are two primary alternatives open to Dr Pepper Snapple Group, Inc.: to enter into the energy beverage market with a new branded product, or to not enter into the energy beverage market. Based on our analysis of the energy beverage market and considering the...

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...activities) that the firm could consider
DrPepper Snapple Group can choose to offer a new energy drink product. (Product/Market Focus and Value Proposition)
DPSG can offer new cola drinks, such as a product resembling Coca-Cola or Pepsi. (Product/Market Focus and Value Proposition)
DPSG can market an existing, or new, product exclusively to women. This would be a response to some of the negative feedback from the DrPepper TEN "Just for Men" marketing campaign. (Product/Market Focus and Value Proposition)
DrPepper Snapple Group could explore the possibility of increasing its distribution in major cities, such as New York. One possible way to do this is by obtaining contracts with local restaurants, or fast food establishments, to serve DrPepper and DrPepper products. This would open the door to a future increase in distribution in these major cities. (Product/Market Focus, Value Proposition, and Core Activities)
Capability Changes: These are changes in capabilities that the firm could consider to address the strategic adjustments proposed (above) by you.
There will have to be changes made to Dr.Peppers current business capabilities
Marketing: When the product is chossen and has been thru all the stages of development, changes in the marketing strategy will be implemented. The marketing department will need to...

...Bargaining Power of Supplier
At this time Dr. Pepper Snapple Inc., is using the same source of supplier as the competitors. By using the same supplier means that DPS have to follow what the competitors such as Coca Cola and Pepsi have done for the worldwide market in particular in US. This may cause costs to grow in the future but the supplier could have the advantages in producing their product by using own distribution and packaging in long term. DPS has the opportunity to expand into international markets and to growth in the Hispanic population.
Bargaining Power of Supplier Threats
Economic stability is a threat that will affect DPS. At this moment of recession, consumers don’t spend money and at the same time prices for natural gas, corn, pulp and other commodities that are necessary for the company increase. Also, health concerns, preferences may affect the industry.
-Substitute Products Opportunities
The company may see the best opportunity in high growth and high margin categories, as well as energy drinks, ready to drink teas, juice drinks and other functional beverages. Positive external trends or changes that may help an organization improve its’ performance.
-Substitute Products Threats
Dr. Pepper Snapple group should be aware on the substitutes product offered by the competitors. The company should maintain an excellent relationship with wholesalers and retailers such as supermarket,...

...Case study - Group 8
EXECUTIVE SUMMARY: DRPEPPER SNAPPLE
Following analysis performed for the external and internal environment, we have identified various
important aspects that need to be considered while shaping the overall strategy for DPS. First of all, our internal
analysis surfaced an important weakness of DPS; 40% of DPS’s distribution strat egy depends on its competitors.
This creates strong dependence on the competitors for the company to prosper, which limits their competitive
capacity, especially when low cost leadership strategies are concerned. These strategies are not via ble for DPS and
present a retaliation risk. Also, considering the threats and opportunities of the industry, we believe that a
differentiation strategy would be the most suitable.
We observed changes in the lifestyle of consumers and rise in interest for healthier products, as well as for
those that reinforce well-being. There are also changes in the regulations concerning health laws. While these are
threats for the high calorie drinks within the DPS portfolio, it also presents an important opportunity for the
industry, as the market for healthy and low calorie products have not been completely exploited yet. For examp le,
in 2013, flavored and functional waters are estimated to grow by 71%. We believe that the company is in a strong
position to take advantage of this opportunity, given its strength in developing new...

...I. Define the Problem
Central Problem
DrPepper Snapple faced problems deciding whether the company should enter into the energy drink market. The energy drink market is a high growth and high-margin business. Recent rise in such functional drinks has DrPepper wanting to tap into this fast growing market. Dr. Pepper is one of the only major domestic carbonated soft drink companies that have not introduced a line of energy drinks. The challenge DrPepper Snapple faces is what would be the best way for it to market a new energy drink product. The company simply does not have the income to compete in advertising against Red Bull.
Sub Problem
DrPepper is indecisive about what market it wants to target. The energy drink market range from males ages 12 to 34. Drpepper is trying to decide whether or not it would be good to target the existing market are restructure the drink and make it more segmented to an older group of people. In deciding, it must focus on the flavors and ingredients that will differentiate the product from its competitors.
II. Relevant Information
Characterize the Industry
The energy drink is a consumer product that satisfies the need for consumers to enhance their energy. There are several competitors in the energy drink market. Red Bull...

...Introduction to Problem
Dr. Pepper Snapple, Inc. is a leading producer of flavored beverages in North America and Caribbean. The success of the company is characterized by more than 50 different brands that are synonymous with the refreshment, fun and flavor. Some of these brands include: Dr. Pepper, 7UP, Sunkist; A&W. Some of the leading brands are number one in the market. The issue Dr. Pepper faces is related to whether or not the company should enter into the energy beverage market. In 2007, Dr. Pepper Snapple, Inc. was the only major domestic carbonated soft drink company (CSD), which did not introduce a line of energy drinks. Dr. Pepper Snapple, Inc. needs to determine the most effective and efficient way to enter the market.
Alternatives
The alternatives Dr. Pepper Snapple, Inc. faces are whether or not to enter into the energy drink market. It seems that launching a new product with the energy beverage market would be a good idea for Dr. Pepper Snapple because their strengths are strategically aligned with what makes a competitor successful within this market. The major challenges within the energy beverage market are identifying the target market, distribution, and advertising. If these challenges are approached correctly they can lead to a competitive advantage...

...Case Summary
In early September 2007, Andrew Barker emerged from a lengthy discussion on the energy beverage market in the United States. As a brand manager for Snapple beverages at the DrPepper Snapple Group, Inc., he was charged with assessing whether or not a profitable market opportunity existed for a new energy beverage brand to be produced, marketed, and distributed by the company in 2008. DrPepper Snapple Group, Inc. was the only major domestic nonalcoholic beverage company in the United States without a significant branded energy drink of its own. The decision to explore a new energy beverage was made by senior company management as part of a corporate business strategy to focus on opportunities in high-growth and high-margin beverage businesses. After launching a ready-to-drink sports drink, the DrPepper Snapple Group, Inc. believed they should put into consideration of introducing a new energy drink beverage.
1. Decision problem:
In the decision process, I am going to explain the key decision issues that DrPepper Snapple Group, Inc. will be faced with when launching their new energy drink “Rush.” The first key thing to ask your self (as the decision maker) is when launching a new energy drink will it be profitable? Obviously if your company will not make a profit from launching a new product, it does not seem feasible to...

...Five Porter Forces
Coca Dr. Pepper Snapple Group
substitues: Pepsi, Sierra Mist, Mountain Dew, Gatorade, Dole juices, Tropicana Juices, Sobe Drinks,
Competitor Rivalry: Pepsico, Nestle, Coca-Cola
New Entrants: very few, since Coca-Cola has expanded into different kinds of softdrinks, as well as energy drinks and fruit juices as well, making it difficult for new companies to make profits if they choose to enter the beverage industry.
Buyers: Individuals, companies, schools, restaurants
Bargaining power: low, since Coke supplies a numerous variety of products buyers do not have a huge impact on pricing and quantity. Also, customers develop brand loyalty to Coke, thereby making it difficult for buyers to affect prices and quanities as well.
Suppliers: fastfood restaurants, vending machines, school campuses.
Bargaining power: very high, since companies can easily provide Pepsi products which serve as excellent substitutes.
Compliments: pizza, burgers, hot dogs, chips, etc
SWOT
Strengths
Weaknesses
Concentrated in North America (US, Canada, Mexico), where almost 70% of revenues come from
Health Craze will hurt soft drink sales
Opportunities
Acquisitions &amp; alliances
Bottled water growth
Hispanic growth in the US and Pepsi's ability to meet their tastes with current product lines (i.e., Sabritas chips)
Growth in emerging markets
Growing consumer health consciousness will help Pepsi as it is already a leader in...

...Dr. Pepper Company
I. Case Summary
From being a practically unknown soft drink company to now being one of the highest performing of the 1000 largest manufacturing firms, Dr. Pepper has evolved to become an international beverage organization. Dr. Pepper began its roots back in 1880, in Waco, Texas, when a young soda jerk invented a soft drink which he named after his father-in-law (Dr. Pepper). Robert Lazenby began to market the drink on commercial basis in 1885, and it was not until 1922 that an extensive sales and distribution program was initiated. The current president of the organization is Mr. Woodrow Wilson Clements together with Joe K. Hughes who is the executive VP of the firm. The firm is facing a pressure of product differentiation and expansion despite of its extensive marketing strategy to expand its market and advertise its product.
II. Case Objective and Key Issues
A. Case Objectives
1. To understand the importance of product differentiation for a firm like Dr. Pepper who is constantly faced with fierce competition.
2. To observe marketing and other strategies of Dr. Pepper to gain market share and attract new consumers.
B. Key Issues
1. How Dr. Pepper can differentiate its products from that of the competition.
2. How to reach new markets and...